Redwood City, Calif.-based biotechnology startup Proteus Digital Health announces that it has closed a debt-backed financing package totaling $31.6 million, provided by Oxford Finance and Silicon Valley Bank. The funding follows last year’s Series F financing round that netted the company $62.5 million, and raises its total financing raised to more than $200 million since its 2001 formation.

Proteus is working on an ingestible pill packed with biosensors capable of measuring a variety of physiological information such as medication consumption, heart rate, activity levels, and sleep patterns. Information collected by the sensors is electronically transmitted to a patch worn on the skin which contains a BlueTooth antenna capable of pushing the information to a smartphone app. The sensor has no battery and runs on the electrical charge found naturally in the human body.

The pill is intended to be used to improve medication compliance for newly discharged hospital patients who are being sent home on a new medication. The pill is chemically inactive, but when taken in conjunction with a new medication, it can track the time and frequency patients are taking their medications.

The pill was piloted with Lloyd’s Pharmacy in the UK as an over the counter support system to help caregivers track medication compliance of family members. Within the pilot, pharmacists packaged medications in a weeklong pillbox that stored medications broken out into daily doses. The new medication, as well as the Proteus smartpill, were placed in each daily compartment of the pillbox and patients were instructed to take them together. The service was offered as a service for $100 per month and reportedly worked as intended, allowing caregivers and family members track adherence for newly prescribed medications.

Oxford University was involved in an early pilot of the technology and the company hopes to expand into full clinical trials for newly diagnosed heart failure patients in the UK sometime in 2014.

There is a great deal of excitement around Proteus and its ability to reduce readmission rates due to poor medication compliance. In the US, an average of 20 percent of Medicare patients end up back in the hospital within 30 days of discharge, a problem CMS is beginning to crack down on by fining hospitals with poor reimbursement rates.

Proteus received FDA clearance for the smartpill in 2012 for placement in an inactive pill only. The company hopes to eventually receive approval to embed its sensor in an active pill, which will allow it to market its technology directly to pharmaceutical companies, which will have a significant impact on its monetization options. With $179 million raised through six investment rounds, and its most recent $30 million bank loan, it appears that Proteus has neared the end of the line from a fundraising perspective, and so finding a viable monetization strategy has become critical.